Railway Budget Contents and terms

Elements of Railway Budget

The budget consists of

  • A review of the preceding year Including the actual receipts and expenditure.
  • An estimate of receipts and expenditure of the coming year.
  • Proposals if any for meeting the requirements of the coming year.

Gross Receipts

  • Coaching Earnings(less refunds)
  • Goods Earnings(less refunds)
  • Sundry Earnings, viz, Telegraph, rent, Toll, Commercial Publicity, Catering, Sales Proceeds, Interests, Maintenance charges on sidings, Saloons, Postal Vehicles etc.

Expenditure

Expenditure are of two types

  • Voted Expenditure: Voted Expenditure is such class of expenditure for which the provision of Fund is made subject to vote of Parliament. These are items proposed to be met from the Consolidated Fund of India for which proposals are sent in the form of Demands for Grants for vote by the Parliament.
  • Charged expenditure: Charged expenditure is such class of expenditure for which the President is according the sanction. Pay, Allowances etc. which are charged upon the Consolidated Fund of India comes under this.

Demands for Grants

  • Proposals sent in the form of Demands for Grants for voting by Parliament to meet expenditures from the Consolidated Fund of India are known as Demands and when the Demands are granted by Parliament , it is known as Grants.

Activity

Demand No.

Details

Policy formulation common to all Railways

1

2

Railway Board

Misc. Expenditure

General Superintendence and Service

3

General Superintendence and Managements

Repairs and Maintenance

4

5

6

7

Permanent Way and Works

Motive Power

Carriage and Wagon

Plants and Equipment

Operating Expenses

8

9

10

Rolling Stock

Traffic

Fuel

Staff Welfare, Retirement Benefits & Miscellaneous

11

12

13

Staff Welfare, Miscellaneous Working Expenses

PF, Pension

Retirement Benefits

Railway Funds and payment to General Revenues

14

15

Appropriation to DRF and Pension Fund

Dividend to General Revenues and Repayment of loans

Works

16

New Lines, Doubling, Gauge Conversion, Rolling Stock, Track Renewals, Bridge Works, Traffic facilities, S&T works, M&P, Staff Quarters etc.

Demands 1 to 15 pertains to Revenue Demand and 16 pertains to Capital

Appropriation Bill

  • After the Demands for Grants are voted by Parliament, Appropriation bill is introduced to provide for appropriation of money required to meet the expenditures. When this bill is passed, charged expenditure is passed by the President. Railway Board makes allotment to each unit through an order called Budget Order.

Reappropriation

  • Reappropriation means transfer of funds originally assigned to a specific object to supplement funds to another object. 
  • Railway Board have full powers to transfer funds from one sub-head to another within a grant but not from one Grant to another in respect of voted and Charged expenditure. 
  • But transfer between voted and Charged expenditure is not permissible.
  • In respect of Demand No. 16 Reappropriation is totally not admissible.

Budget Reviews

The purpose of Budget Review is:

  • To review the progress of expenditure with Budget Grant.
  • To estimate the actual requirements for the remaining period of the year and modify requirements to meet the needs.
  • To enable the Railway Board for redistribution of funds among Railways.

Factors that contribute t0 revision of requirements are :

  • Inflationary trend in price levels of materials and labour affecting contracts and other expenditure.
  • Change in the scope of work necessitating preparation of supplementary estimate.

Budget Review is done in three ways:

  • August Review in August
  • Revised estimate(including Budget Estimate).
  • Final modification in February.

Consolidated Fund of India and Contingency Fund

  • All earnings and expenditure forms part of Consolidated Fund of India. 
  • Unforeseen expenditures like protection of life and property, restoration of lines due to accidents etc. is met from the Contingency Fund held by the President  and Post facto sanction of Parliament is obtained to recoup Contingency Fund.

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